Liz Fedor, Star Tribune
Northwest Airlines wants to slash mechanics' wages by 25.7 percent and eliminate 2,840 union jobs, the airline's mechanics union disclosed Friday.
The proposal would wipe out more than half of the Northwest employees represented by the Aircraft Mechanics Fraternal Association (AMFA).
The Eagan-based carrier has been losing money since early 2001, and now it wants to sharply reduce its maintenance workforce to save $176 million a year.
"We asked the company if the targeted $176 million annual savings they were seeking from you was their initial extreme position that is typical of negotiations," said Jeff Mathews, AMFA's contract coordinator. In a four-page report to AMFA members, Mathews described the figure as "the actual amount of money they want from you."
At the end of 2000, Northwest employed 9,300 mechanics and related employees. That group has been hit the hardest by job cuts. Today, it is 43 percent smaller, and AMFA said it stands at 5,294. Northwest now wants to reduce the workforce to 2,454 employees.
Mathews declined to comment on the proposal on Friday night. A Northwest spokesman also did not discuss management's labor strategy.
In his memo, Mathews acknowledged that the company is girding for a showdown with AMFA.
"We would like to thank the many members who have reported to us on the company's efforts to hire scabs in the event of a work stoppage," Mathews said. "This issue was discussed at the negotiating table with the company and they confirmed your reports."
AMFA leaders were in negotiations with management this week in Bloomington.
Mathews reported that there was a frank discussion Thursday with Kris Bauer, Northwest's senior vice president of technical operations. He wrote that Bauer "verified that the plan to outsource our work and eliminate our jobs was developed several years ago by Andy Roberts, executive vice president of operations, and himself."
Under the current four-year contract, which is amendable this month, Northwest is permitted to outsource up to 38 percent of its maintenance work. Last month, Northwest CEO Doug Steenland told a Minnesota Senate committee that the company is outsourcing 37 percent of that work.
It uses vendors in the United States and overseas, including Singapore.
Roberts, in a recent Star Tribune interview, said it is purely a "business decision" to use outside vendors to reduce costs. "We are fighting for our very existence here," he said. Northwest has lost more than $3 billion since 2001, and top management is attempting to reduce annual labor costs by $1.1 billion.
Heavy maintenance work is 50 percent cheaper at outside vendors, Roberts said. Hiring a contractor to do component maintenance cuts Northwest's costs by 30 to 40 percent.
By mid-July, Northwest is expected to furlough 669 mechanics as it parks 30 DC-9s. The airline provided that figure to the state of Minnesota.
Under Northwest's proposal, the company would eliminate 916 of the 1,417 aircraft maintenance technician jobs. It also would cut 809 of the 882 ground operations cleaner jobs. It would preserve 1,084 of the 1,650 line maintenance technicians.
In addition to seeking a 25.7 percent pay cut from mechanics, management wants to reduce the pay of AMFA cleaners by 25.3 percent and AMFA custodians by 26.1 percent. The mechanics still employed by Northwest have several years of seniority, and many Twin Cities-based mechanics are making about $70,000 per year.
Mathews reported Friday that Northwest gave the union its job and pay cut proposal on Wednesday. That was two days after AMFA negotiators at bankrupt United Airlines reached a tentative agreement on concessions.
Steenland repeatedly has said Northwest must bring its wage rates closer to United's pay scales because Northwest cannot operate with a major cost disparity.
United's agreement, which will be voted upon by rank-and-file members, includes a 3.9 percent pay cut and reductions in vacation time and holidays. That pay reduction would be on top of a 14 percent pay cut that United mechanics took previously.
Earlier this week, the head of the Northwest pilots union urged his fellow union leaders to support cutbacks to save employee jobs and the airline. "The time has come for all union leaders to move beyond denial and anger and act responsibly for the good of their members," said Mark McClain, pilots union chairman.
"It is inexcusable that Mr. McClain has tried to interject himself between you and your negotiating committee," Mathews said in his report to AMFA members.
AMFA and Northwest negotiators will return to their mediated talks on May 31.
